Peake urges House to accept rental tax changes

Friday

ORLEANS -- The fate of the short-term rental tax bill, aka the Airbnb bill, is uncertain after Gov. Charlie Baker sent the legislation back to the House and Senate with four amendments.

State Rep. Sarah Peake (D- 4th Barnstable) said this week that she suggested to House Speaker Robert DeLeo that the House accept Baker’s changes. The Senate would have to agree, too.

“It would still be a big chunk of money for the towns and the [water fund]. Let’s not get stuck now,” she told The Cape Codder.

As approved by the House and Senate early last week, H.B. 4841 calls for several taxes on rentals of up to 31 days, split between the state, the towns where the rentals occur, and a water protection fund aimed at helping Cape Cod municipalities pay for wastewater infrastructure.

All told they could add 14.45 percent onto a vacation renter’s tab, and in the case of the local option portion of taxes, provide a new revenue stream for cash-strapped towns.

Estimates on how much the towns could collect vary; Peake put the number at upward of $1 million a year for Chatham and Provincetown. She said an official in Orleans believes the town could receive up to $750,000.

All of the Lower Cape towns have supported efforts to create a short-term tax; it's slated to take effect Jan. 1.

Other pieces of the bill require a state registry of rental properties, liability insurance for property owners and other provisions.

Baker’s four amendments, sent to the House and Senate on Aug. 1, would:

* Exempt from the taxes any property that is rented for up to 14 days a year. In a letter to the Senate and House, he said this change would reduce the tax revenues by just 1 percent. (These properties also would be exempt from carrying the proposed $1 million liability insurance.)

* Change the definition of short-term rental duration from "up to 31 days" to "up to 90 days."

* Limit information contained in the state registry to a property’s street and town, rather than its full address. This is to protect property owner privacy, according to his letter.

* Remove the requirement that 35 percent of the community impact fee be dedicated to affordable housing or local infrastructure.

Since the House is in “informal session,” action on the bill could come at any time, or not at all.

If it were to be revised with only some of Baker’s amendments, and he vetoed it, the bill would essentially be dead, since legislators cannot override a veto during informal session.

Peake said there could be some compromise on the amendments in the House.

“But then, any revised bill still has to go back to the Senate,” she noted.

“My feeling is that we should accept the governor’s changes. We can always try to [further] amend the bill later,” she said.

“We can’t dawdle. People need to know how to plan for their businesses” next year, she said.